Death Knell Stocks

Posted in Finance, Accounting and Economics Terms, Total Reads: 472

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Definition: Death Knell Stocks

Death knell stocks are those which are not doing well in the stock market and are on the verge of declaring insolvency. The investor sentiments are downward on the stocks and they are traded at very low prices. These are considered to be highly risky assets. However this does not mean that the stock has stopped existing.

There can be stimulus package by the government or a take over to revive the company. One has to be careful to distinguish it from other stocks which trades at low prices. They are generally termed as penny stock but have got potential in the future, however death knell stocks show little momentum for turn around. The fundamentals become weak and long term sustenance looks minimal.

The debacle of Lehman brother during the 2007 recession is an example of death knell stocks.